Rural broadband escapes axe in Spending Review

Plans to roll out broadband services to rural areas of the UK will be one of the few elements of the Government's IT spending programme to survive unscathed from the slash-and-burn of today's Comprehensive Spending Review.

Rural broadband plans are one of only a handful of IT initiatives to squeak through the cuts announced today in parliament by chancellor George Osborne, which will see £83 billion slashed from public spending.

The BBC is to chip in additional funding to boost the government's rural broadband plans, pledging to invest £300 million of the £530 million project, which aims to bring faster Internet connections to more than two million UK households.

The remainder of the cash comes from leftover cash originally earmarked to ease the nation's switchover to digital TV, a process that has cost considerably less than anticipated.

The BBC will have to cut around £140 million a year from its annual budget of £3.6bn to meet the cost of an agreed six-year freeze in the TV licence fee.

Telecoms provider BT recently agreed to roll out fibre optic services across the whole of Cornwall, partly funded by money from the EU - but public sector money is regarded as necessary to extend rural roll-out.

But private sector players such as BT are unwilling to invest in connecting up the estimated third of Britons who would otherwise miss out, unless there is sufficient demand. BT's 'vote for fibre' campaign to encourage local lobbying will only look at proposals for exchanges with at least 1,000 votes.

Dr Charles Trotman, chairman of the Final Third First campaign, thinks such schemes will heighten the gap between broadband haves and have-nots.

"Where do you find an exchange with a thousand people in a rural area?" Trotman said. "It is a good initiative, but it has to be rethought or it will add to the urban/rural digital divide."